Market Outlook entering the Week of September 28th = Unconfirmed Downtrend

Short-term (20 DMA): Downtrend
All the major stock market averages fell below their 20-day moving averages during the week.  The Dow was able to reclaim that level on Friday, but just barely.

Intermediate (50 DMA): Downtrend
All the major stock market averages either tested or fell below their 50-day moving averages.

Long-term (200 DMA): Uptrend
The current bull market [March 2009 – Present] continues.

Market Commentary
William O’Neil’s Big Picture analysis showed an uptrend under pressure for the entire week.  The long term Objective Elliott Wave uptrend from Tony remain intact, but the mid-term uptrend is under siege.

Revisiting last week’s commentary, the S&P500 level of 2,011 was a bridge too far.  We passed 1,991, meaning the probability of a correction is high. Per Tony:

Clearly the current pattern, technical indicators, and some specific indices favor the bearish scenario.

Rather than looking for confirmation of another uptrend, we’re now looking for confirmation of the next downtrend, which is expected to last 2-3 months and cover 20-30%.  S&P 1,973 is the magic number for confirming said downtrend.

If you haven’t already, check your sell signals.  Remember: Keep your losses small, and live to invest another day.

Elliott Wave Analysis from Elliott Wave Update by Tony Caldaro

2014-09-27 – US Stock Market Averages